The following table shows the constituent stocks of a hypothetical index. Stock B splits two-for- one...
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The following table shows the constituent stocks of a hypothetical index. Stock B splits two-for- one during the period. Stock A B C Beginning of Period Price ($) Shares 2,000 500 1,200 30 75 36 End of Period Price ($) Shares 2,000 1,000 1,200 26 40 32 Calculate the returns on both the price-weighted index and the market value-weighted index of three stocks over the period. If you just buy 5,000 shares of stock C for $36, hold for 1 year, collect $8 dividend and sell it at $32. Calculate your total return. The following table shows the constituent stocks of a hypothetical index. Stock B splits two-for- one during the period. Stock A B C Beginning of Period Price ($) Shares 2,000 500 1,200 30 75 36 End of Period Price ($) Shares 2,000 1,000 1,200 26 40 32 Calculate the returns on both the price-weighted index and the market value-weighted index of three stocks over the period. If you just buy 5,000 shares of stock C for $36, hold for 1 year, collect $8 dividend and sell it at $32. Calculate your total return.
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SOLUTION To calculate the returns on both the priceweighted index and the market valueweighted index we need to consider the changes in stock prices a... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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